THE VOLUNTARY INSURANCE ADVANTAGE
Broker, Employer and Employee Findings – 2014 Aflac WorkForces Report
N140227 6/14
Introduction
The Affordable Care Act has brought changes that businesses can’t ignore.
Aflac surveyed 314 brokers, 5,209 A...
2014 AWR Broker Findings
Top 5 broker concerns
Key Issue
Rising health care costs impacting client
decisions
47%
Understanding the impact of HCR 38...
Health care reform is driving change
49% of brokers at least somewhat agree they are considering
exiting the industry give...
Snapshot of brokers surveyed
Small Brokerage Medium Brokerage Large Brokerage
Average time in
current role
11 years 9 year...
Broker policy breakout
Small Brokerage Medium Brokerage Large Brokerage
Group Policies
(<100 lives)
48% Group Policies
(<1...
Voluntary insurance benefits most sold by brokers
Small Brokerage Medium Brokerage Large Brokerage
Dental Term Life Term L...
Brokers’ tenure selling voluntary insurance benefits
Small Brokerage Medium Brokerage Large Brokerage
< 6 months 9% < 6 mo...
Brokers who are selling voluntary insurance benefits are seeing results
35%
29%
75%
Brokers offering voluntary are more
li...
The Growing Importance of
Voluntary Insurance Policies
2014 AWR Employer and Employee Findings
• “Personal financial issues” was named as the top non-work related issue that
distracts most employees during work.
• Vol...
Workers want benefits – and are willing to pay for them
• 88% of workers at least somewhat agree that voluntary insurance ...
How to best put voluntary insurance policies to work
• As a complement to existing employer-paid benefits options—enhance
...
Workers’ Health Care Reform Concerns
Heath care reform adds to confusion
16
Health care reform is confusing:
• 73% of workers agree that health care reform is ...
Communication is key to understanding the impact
of health care reform
• 68% of employees believe their employers will edu...
Concern #1: They don’t know enough to effectively
manage their health care options
• 51% of workers say they do not prefer...
Concern #2: Unsure how they will be affected
Since many do not understand health care reform, they are left wondering
how ...
Concern #3: They are not financially prepared
The reality is that many companies already shift a significant share of heal...
Concern #4: They underestimate out-of-pocket
medical costs, resulting in financial stress
Very few American workers unders...
About the Study
The 2014 Aflac WorkForces Report is the fourth annual Aflac employee
benefits study examining benefit tren...
Thank you
23
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Voluntary Insurance Advantage - 2014 Broker, Employer & Employee Findings

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The Affordable Care Act has brought changes that businesses can’t ignore.

Aflac surveyed 314 brokers, 5,209 American workers and 1,856 business decision-makers to determine the impact health care reform is having on brokers’ business models and employers’ benefit offerings.

The results show the growing importance of voluntary insurance benefits.

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Voluntary Insurance Advantage - 2014 Broker, Employer & Employee Findings

  1. 1. THE VOLUNTARY INSURANCE ADVANTAGE Broker, Employer and Employee Findings – 2014 Aflac WorkForces Report N140227 6/14
  2. 2. Introduction The Affordable Care Act has brought changes that businesses can’t ignore. Aflac surveyed 314 brokers, 5,209 American workers and 1,856 business decision-makers to determine the impact health care reform is having on brokers’ business models and employers’ benefit offerings. The results show the growing importance of voluntary insurance benefits. 2 Confidential – For Informational Purposes Only. These materials contain proprietary information and material that is owned by Aflac and/or its licensors, and is protected by applicable intellectual property and other laws, including but not limited to copyright. By accessing these materials, you agree that you will not use such proprietary information or materials in any way whatsoever except for informative and training purposes only. You further agree not to modify, loan, sell, distribute, or create derivative works based on these materials. Any use not specifically permitted herein is strictly prohibited and may subject you to civil and criminal penalties. Aflac herein refers to American Family Life Assurance Company of Columbus and/or American Family Life Assurance Company of New York and/or Continental American Insurance Company and/or Continental American Life Insurance Company.
  3. 3. 2014 AWR Broker Findings
  4. 4. Top 5 broker concerns Key Issue Rising health care costs impacting client decisions 47% Understanding the impact of HCR 38% Remaining relevant 29% Diversifying revenue streams 27% Client uncertainty of HCR 27%
  5. 5. Health care reform is driving change 49% of brokers at least somewhat agree they are considering exiting the industry given changes in the health care landscape. 67% 50% 36% At least somewhat agree they have seen many of their peers exit the industry in the past year. Completely or strongly agree they are confident in their firms' and the industry's future. Completely or strongly agree health care legislation represents an opportunity for them and their businesses.
  6. 6. Snapshot of brokers surveyed Small Brokerage Medium Brokerage Large Brokerage Average time in current role 11 years 9 years 8 years Revenue stream Health/ Medical Insurance 37% Health/ Medical Insurance 28% Life Insurance 28% Prop. & Casualty 22% Life Insurance 22% Health/ Medical Insurance 23% Life Insurance 14% Prop. & Casualty 21% Prop. & Casualty 16% Voluntary Benefits 13% Voluntary Benefits 14% Voluntary Benefits 15% Disability Insurance 10% Disability Insurance 11% Disability Insurance 11% Other 4% Other 4% Other 7%
  7. 7. Broker policy breakout Small Brokerage Medium Brokerage Large Brokerage Group Policies (<100 lives) 48% Group Policies (<100 lives) 38% Individual 40% Individual 29% Individual 33% Group Policies (<100 lives) 30% Group Policies (100+ lives) 23% Group Policies (100+ lives) 29% Group Policies (+100 lives) 30%
  8. 8. Voluntary insurance benefits most sold by brokers Small Brokerage Medium Brokerage Large Brokerage Dental Term Life Term Life Short-term Disability Insurance Whole Life Annuities Term Life Homeowners (Prop. & Casualty) Universal Life Long-term Care Dental Short-term Disability Insurance Accident Vision Dental 53% of brokers say they plan to increase the amount of voluntary insurance benefit revenue at their firms.
  9. 9. Brokers’ tenure selling voluntary insurance benefits Small Brokerage Medium Brokerage Large Brokerage < 6 months 9% < 6 months 5% < 6 months 12% 6 months to < 1 year 10% 6 months to < 1 year 21% 6 months to < 1 year 12% 1 to <3 years 18% 1 to <3 years 26% 1 to <3 years 22% 3 years to <6 years 18% 3 years to <6 years 11% 3 years to <6 years 17% 6 years to <10 years 13% 6 years to <10 years 17% 6 years to <10 years 13% 10+ years 32% 10+ years 20% 10+ years 24% Roughly one-quarter of brokers say they began selling voluntary insurance benefits less than one year ago.
  10. 10. Brokers who are selling voluntary insurance benefits are seeing results 35% 29% 75% Brokers offering voluntary are more likely to increase the number of clients. Brokers offering voluntary are more likely to grow their sales. Brokers NOT offering voluntary are more likely to DECREASE their client base.
  11. 11. The Growing Importance of Voluntary Insurance Policies 2014 AWR Employer and Employee Findings
  12. 12. • “Personal financial issues” was named as the top non-work related issue that distracts most employees during work. • Voluntary insurance policies help employees cope with living expenses and out-of-pocket costs associated with accidents or illnesses—costs major medical insurance was never intended to cover. • Voluntary insurance policies provide benefits regardless of major medical insurance, including policies that will be in place through public or private marketplaces/exchanges. • Voluntary insurance provide workers with an essential safety net. 12 Change presents an opportunity Health Care Reform does not eliminate the need for voluntary insurance; it shines a spotlight on employees’ increasing need for voluntary insurance!
  13. 13. Workers want benefits – and are willing to pay for them • 88% of workers at least somewhat agree that voluntary insurance benefits are a part of a comprehensive benefits program. • 52% of those without access to voluntary insurance benefits say they would at least be somewhat likely to apply for voluntary insurance benefits if their employer offered them. • 63% see a growing need for voluntary insurance benefits. • When asked why the need for voluntary insurance benefits is growing today, workers say: • Rising medical costs: 76% • Rising medical coverage costs: 66% • Increasing deductible and co-pays: 61% • Because employer reduced benefits or coverage: 37%
  14. 14. How to best put voluntary insurance policies to work • As a complement to existing employer-paid benefits options—enhance offerings with little or not cost. • Restructure current employer-paid benefits options to include employee buy-up options. • Replace some employer-paid benefits options with voluntary insurance policies. 14
  15. 15. Workers’ Health Care Reform Concerns
  16. 16. Heath care reform adds to confusion 16 Health care reform is confusing: • 73% of workers agree that health care reform is too complicated to understand. • 71% of workers agree that their personal health insurance situation will become more confusing. • Though the online exchange or marketplace for individual coverage opened in 2014, only 10% of workers say they are very or extremely knowledgeable about federal and state health care exchanges.
  17. 17. Communication is key to understanding the impact of health care reform • 68% of employees believe their employers will educate them about changes to their health care coverage as a result of health care reform. • 41% of employers feel extremely or very prepared to address changes to the health care system in 2014. • 45% of employers will rely on brokers or insurance companies to suggest changes to their benefits packages due to the changing health care environment.
  18. 18. Concern #1: They don’t know enough to effectively manage their health care options • 51% of workers say they do not prefer to be in control of their health care expenses/options because they don’t have the time or knowledge to effectively manage it. • Workers have limited knowledge of key consumer-driven health plan options. Those who say they are extremely or very knowledgeable about: • Flexible Spending Accounts – 40% • Health Savings Accounts – 31% • High Deductible Health Plans – 26% • Health Reimbursement Accounts – 21% • 47% of workers have not begun to prepare themselves for changes to their benefits package due to health care reform. 18
  19. 19. Concern #2: Unsure how they will be affected Since many do not understand health care reform, they are left wondering how health care reform will impact them. • While 26% of workers strongly or completely agree they will have better insurance because they will have greater control, • Only 14% of workers at strongly/completely agree that the quality of their health care will increase as a result of health care reform. Many indicate they believe the law will affect the cost of their health care coverage. • The majority (86%) at least somewhat agree the medical costs they are responsible for will increase. 19
  20. 20. Concern #3: They are not financially prepared The reality is that many companies already shift a significant share of health care premiums to their workers, and yet: • 42% say they are not at all/not very prepared to pay for out-of-pocket expenses associated with a serious illness or injury • 49% of employees have $1,000 or less to pay for out-of-pocket expenses associated with an unexpected serious illness or accident • 27% of employees have less than $500 available to pay for out-of-pocket expenses associated with an unexpected serious illness or accident • 39% of workers would have to borrow from their 401(K) and/or from friends and family to pay for out-of-pocket expenses associated with an unexpected serious illness or accident 20
  21. 21. Concern #4: They underestimate out-of-pocket medical costs, resulting in financial stress Very few American workers understand the impact of medical expenses on their overall financial health. In fact, many workers are facing financial crisis today: • 42% say they are not at all/not very prepared to pay for out-of-pocket expenses associated with a serious illness or injury. • 69% of workers at least somewhat agree that they regularly underestimate the total cost of an injury or illness, including medical, household and out-of-pocket expenses. • At least one-in-ten (13%) workers are currently dealing with high medical bills, roughly 20 million workers. • Nearly one-quarter (24%) of the workforce has been contacted by a collection agency due to medical costs and/or had their credit score negatively impacted. • 10% of workers have missed bill payments due to high medical costs, totaling approximately 15 million workers. 21
  22. 22. About the Study The 2014 Aflac WorkForces Report is the fourth annual Aflac employee benefits study examining benefit trends and attitudes. The study, conducted by Research Now in January 2014, captured responses from 314 brokers, 1,856 benefits decision-makers and 5,209 employees across the U.S. To learn more about the Aflac WorkForces Report, visit AflacWorkForcesReport.com 22
  23. 23. Thank you 23

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